To maintain leading practice regulation of South Australia's petroleum, gas storage, pipeline transmission and geothermal energy industries, in February 2021 the Department for Energy and Mining (DEM) began a review of the current Petroleum and Geothermal Energy Act 2000 (PGE Act) and associated Regulations.

The review focussed primarily on enhancing existing provisions in the PGE Act to more effectively and efficiently deliver the objectives and intent.

South Australia's Climate Change Action Plan commitment to embrace future fuels requires appropriate regulatory frameworks to ensure safe operation of the essential infrastructure for such fuels. Accordingly, the proposed amendments will expand the scope of the PGE Act to cover production and pipeline transmission of hydrogen.

In keeping with this extended scope, and to better reflect the PGE Act's existing scope for petroleum, gas storage and geothermal resources, the review proposes that the PGE Act's title be changed to the Energy Resources Act.

The process was launched with the release of an Issues Paper, detailing the proposed amendments and inviting public comment.

In response to public submissions a draft Bill to amend the PGE Act has been prepared and is now available for public comment. Submissions close at 5pm on Friday 25 June 2021. All submissions are to be made via the YourSAy website.

The draft Bill is based on comments received during public consultation on the PGE Act Issues Paper beteeen 11 February and 26 March 2021. Given the predominately administrative nature of the proposed amendments, no major concerns were received. However, the submissions indicated strong support for extending the scope of the current provisions under the PGE Act to also licence and regulate the generation of renewable hydrogen.

The interest shown in renewable hydrogen projects in South Australia calls for these amendments to be implemented as a matter of  pressing urgency to give regulatory certainty to underpin investment in this evolving industry.

The Minister for Energy and Mining intends to table the Bill during July 2021.

This discussion paper details the regulatory changes that will follow once the Bill is approved. The Department for Energy and Mining invites your consideration and comment of the proposed amendments.

Some of the key amendments proposed in the Bill include:

1Revise the title of the PGE Act to the "Energy Resources Act" to reflect the broader scope of the Act to include future fuels (e.g. hydrogen) (Clause 5).
2In response to submissions from the hydrogen industry, the current scope of the provisions under the PGE Act will be expanded to also include generation of any hydrogen from means not already permissable under the existing Act, such as electrolysis of water using electricity. This amendment will afford all hydrogen generation sectors the same best practice regulatory and one-window to government regime as is currently afforded to the oil and gas industries under the existing PGE Act. This will be achieved through introducing a specific Hydrogen Energy Licence (Clause 26).
3Improved stakeholder participation requirements by:
a)  more explicity requiring stakeholder engagement by the licensee when preparing Statements of Environmental Objectives (SEOs) (Clauses 44 and 46); and
b)  introducing a mandatory 30-day public consultation period for all Environmental Impact Reports (EIR) and SEOs as part of DEM's assessment and approval process (Clause 50).
4Introduce a Statutory Security so that the Crown has first priority over a Licensee's property in the event of bankruptcy (Clause 60).
5Benchmarking penalties under the PGE Act to be consistent with the Mining Act 1971.
6Introducing the concept Ministerial determinations, as provided for under the Mining Act 1971, to allow for greater flexibility and effectiveness in clarifying and guiding regulatory requirements, particularly for reporting.
7To achieve greater clarity and consistency of the Act's purpose and key intentions, the objects of the PGE Act will be modified to incorporate sustainable ecological development, public benefit and compensation (Clause 6).
8A number of definitions will be revised and introduced in the Act (Clause 7), these include:
a)  revising the definition for "environment" to better capture social and economic aspects and to ensure that the definition includes the public who may be affected by regulated activities.
b)  consolidating all definitions that concern "regulated activities" into the Act, in particular modifying the definition of facility so that it covers all drilling and well intervention equipment.
c)  revising the definition of "geothermal energy" to prevent restricting the means of extraction of geothermal energy.
d)  amending the definintion of "regulated substance" in light of the recent amendment to Regulation 3, namely the addition of "hydrogen and a hydrogen compound or other substance that is a by-product of the production of hydrogen".
e)  modify the definition of transmission pipeline to allow for imported substances (e.g. liquefied natural gas (LNG) and manufactured hydrogen).
f)  modify the definition of "Serious Incident" to "Immediately Reportable Incident" (Clause 34).
9Various improvements relating to greater flexibility in relation to licence terms, maximum licence areas and tendering processes.
10Introducing the concept of "leading perfomance indicators" into the reporting requirements under the Act (Clauses 7 and 47).

It is suggested that the draft Bill be read in conjunction with the current Petroleum and Geothermal Energy Act 2000 and Petroleum and Geothermal Energy Regulations 2013 .